At the heart of the initiative is distilling the cumbersome process of compliances under 22 different laws into a two-page Startup Act.NEW DELHI: The Narendra Modi government wants to provide a powerful launchpad for startups by drastically simplifying the rules and ensuring that innovators are able to take advantage of such an enabling environment, thus unleashing entrepreneurial energies and creating jobs.

At the heart of the initiative is distilling the cumbersome process of compliances under 22 different laws into a two-page Startup Act, a senior government official told ET. The Department of Industrial Policy and Promotion (DIPP) is looking to turn India into a startup haven.

It plans to cut through the thicket of regulations that holds back creativity and stunts the rapid evolutionary cycle that’s a feature of the sector.

“Compliances are a big issue for aspiring startups,” said the official. “We are trying to see whether we can bypass the multiple laws and draft aseparate legislation instead.”

Already home to the fourthlargest startup community in the world, India wants to create a robust ecosystem in which entrepreneurship can flourish as envisaged by the Startup India, Stand Up India initiative of Prime Minister Modi announced in this year’s Independence Day address. Jobs created by Indian startups are expected to rise to 2,50,000 by 2020 from 80,000, according to a Nasscom report.

The government plans to unveil a detailed Startup India plan next month. The DIPP is drawing up a clear definition for startups to ensure that the regime is available only to companies that practice innovation. This is necessary because the government is also considering tax incentives for startups, which it doesn’t want other companies to take advantage of.

Companies that qualify for the tag are likely to be less than five years old, providing an innovative product or service. They will also need to conform to financial norms to ensure that the incentives are not spread too thin.

“It will be a colossal help if the government can do something about this,” said Rohan Malhotra, founder of Investopad, a startup incubator and financing company.

“In the US, you can incorporate a company in a few hours. In India, it is a nightmare to do even basic administration work.” Entrepreneurs feel their energies are sapped by the need to negotiate their way through the bureaucratic maze.

“Most startups have a backlog on compliances and simply get a professional to handle these matters when they want to raise funds,” said Gaurav Kachru, founder, 5ideas Startup Superfuel. “Some of it is a waste of time.”

Last week, DIPP held discussions with leaders of the startup community including SoftBank president Nikesh Arora, Snapdeal CEO Kunal Bahl, Oyo Rooms founder Ritesh Agarwal and former Infosys director Mohandas Pai to draw up a list of action points.

ET View: Now, Here’s a Lazy Startup Gesture!

Open Sesame would be even better, but that doesn't work in real life. New companies will have to comply with state-level and even municipal-level regulation, and it is difficult to see how one single central law can subsume all these — unless the new central law says the new startup will obtain such and such clearance from so and so at the municipal level or the state level. In which case, the law would be superfluous. The point is to make these clearances fast and predictable, not to do away with them. No single state has a complete list of all the clearances/permits required to set up a new business. Passing a new law is lazy pretence, not real improvement of the ease of doing business.